Breaking news: SCMA launches 4th edition of its arbitration rules

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Readers will recall Starboard’s report in July 2020 that the Singapore Chamber of Maritime Arbitration (SCMA) was considering amendments to the 3rd edition of its rules (2015) and had launched a public consultation exercise (see Starboard’s previous update here). This report brings news of the launch today of the 4th edition of the SCMA Rules, which will apply to all arbitrations commenced on or after 1 January 2022. A copy of the new rules and related practice notes can be found here.

The new rules contain revisions to ensure that SCMA arbitration remain relevant and attractive to users. Some of the main features of these revisions are:

  • New modes of documentary service and communication
    To keep up to date with current modes of communication and writing, the new rules allow for service of documents by email, arbitration awards to be signed electronically, and hearings and case management conferences to be conducted virtually.
  • More advance information
    To enable parties to be better informed at an earlier stage of each other’s positions, parties are required under the new rules to disclose more information in their Notice of Arbitration, Response and case statements. For example, claimants are now required to include any choice of law clause, a description of the nature of the claim and the claim value (where possible).
  • Tribunal composition
    The default rule of a three-arbitrator tribunal (where parties do not specify number) will continue. Where parties do specify three arbitrators but do not specify the procedure for their appointment, the new rules provide that, after each party’s arbitrator is appointed, the two arbitrators will constitute the tribunal for the time being and may subsequently appoint a third arbitrator so long as the appointment comes before any substantive hearing or is made if the two arbitrators cannot agree on any matter relating to the arbitration. The new rules also provide that where a third arbitrator has yet to be appointed or if his/her position becomes vacant, the remaining two arbitrators if agreed on any matter have the power to make decisions, orders and awards.
  • Oral hearings no longer mandatory
    The new rules now prescribe that, subject to a request by one of the parties for a hearing, the tribunal will decide if an oral hearing is required or if the arbitration can proceed on a documents-only basis. This is consistent with the position under the UNCITRAL Model Law and also reflects the reality that a large number of maritime arbitrations can and are often resolved on paper.
  • Joinder & Related Arbitrations
    Tribunals have had and will continue to have the power to add parties (with their consent) to the arbitration and to make a single final award that determines all disputes between them, and to also direct that two or more arbitrations that raise common issues of fact or law be held concurrently or consecutively. It is understood that SCMA will be producing protocols or practice notes to support these procedures.
  • New Standard Terms of Appointment
    The new rules introduce Standard Terms of Appointment that will now apply to all SCMA arbitrations unless an arbitrator and the parties otherwise agree. These Standard Terms provide a uniform basis for appointment of tribunal members. They contain terms on independence and impartiality of arbitrators, arbitrator’s fees and expenses, security for fees and expenses, exclusion of liability, release and indemnity, law and jurisdiction.
  • New Expedited Procedure in place of Small Claims Procedure
    An Expedited Procedure with a claim-value limit of US$300,000 replaces the Small Claims Procedure with its claim-value limit of US$150,000. The procedure resolves disputes under a sole arbitrator who will issue an award within 21 days of close of case statements or oral hearing (whichever later). The increase of claim-value limit from US$150,000 to US$300,000 marks the SCMA’s recognition of market sentiment that claims of US$300,000 or less would suffer from disproportionate legal costs unless subjected to a fast-track procedure.
  • Power to prevent change of counsel
    To prevent abuse of arbitral process by late changes in party representation, the tribunal is empowered under the new rules to withhold approval of change in counsel where the conduct of proceedings or the enforceability of any Award may be prejudiced.

The new rules mark SCMA’s continual appreciation of changes in the maritime and arbitration industries and its desire to offer an arbitral procedure that meets the expectation of users. Starboard will continue to closely monitor the developments in relation to the new rules and bring the relevant updates to you.

Dentons Rodyk Senior Partner Lawrence Teh, chairs the SCMA Promotion Committee. Maritime Arbitration is a specialist practice similar to but, in certain areas, very distinct from international commercial arbitration. Readers are advised to seek specialist advice in handling maritime arbitration as rules, practices and customs can vary between places of arbitration and between tribunal members.

*Dentons Rodyk thanks and acknowledges Associates Arina Rashid and Kavitha Ganesan for their contributions to this article.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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